INV-IP-2 Establish Formal Delegate Guidelines

1

INV-IP-2 Establish Inverse Finance Delegate Council

Author: BasedXeno

Summary

Establishes processes for electing a Delegate Council and conducting Delegate Council votes on GovernorMills.

Abstract

It is useful to have delegates in place to streamline the voting process, evaluate & curate proposals, and communicate the impact of proposals. Delegates can efficiently represent large numbers of DAO members, organize positions on proposals internally with their constituents, and vote on-chain in a gas-optimized way. However, being a delegate is a privilege, and should not be a permanent position for those that do not effectively carry out their duties. The following framework will act as a charter that anyone in the DAO can refer to when inquiring into the function of our governance system.

Why Inverse Finance Needs A Delegate Council

The delegate system within Inverse has not been functional for most of 2021 due to two main reasons: governance code was unusable (after most users switched to xINV), and delegates left their posts (obviously these things are related).

Now that we will have full governance capabilities restored, it’s time to consider how to position Inverse to have effective governance systems in place. This proposal outlines a formal framework for a new Inverse Finance Delegate Council that will be used to manage the election of delegates, voting processes, delegate compensation, and other issues relating to the efficient operation of the Delegate Council.

The Delegate Council format mirrors other DAO governance best practices being implemented in DAO’s like Synthetix, Maker, Index Coop, Polygon, and others. The format allows our DAO to make faster decisions, avoid voter apathy, and mitigate the negative effects of a small number of large wallets dominating governance votes or blocking votes by denying a quorum.

How GovernorMills On-Chain Voting Works

Inverse Finance developed the GovernorMills on-chain voting system in 2021 to provide a completely transparent and non-censorable voting system for the Inverse Finance DAO. This type of on-chain voting underscores this DAO’s dedication to decentralization and avoidance of centralized governance applications. Deployed on Ethereum, Governor Mills allows holders of INV and xINV tokens on Ethereum to cast votes for a proposal listed in the GovernorMills application found on Inverse Finance.

Any INV or xINV wallet holder with at least one INV of xINV may access GovernorMills to add a new proposal.

Votes are tallied by wallet address and are visible to the community as they are cast. Other than the unique identifier of the wallet, there is no personally identifiable information transmitted in the GovernorMills voting process and there is no login credential required as is found on systems like Snapshot.

Changes to the GovernorMills code require an on-chain vote by the DAO’s delegate council.

GovernorMills was written by Nour Haridy and Massis Orer. Code for GovernorMills is available in the Inverse Finance git repo.

Specification

Delegate Election Process by Inverse Finance DAO Members

  • Voting for Delegates will begin with an official “election period”, during which time previous & new candidates can pitch themselves to the DAO
  • The cap on the number of formal Inverse Finance DAO delegates is 7 which may be increased via majority vote of the delegates. The ideal minimum number of delegates to reach a quorum and conduct delegate council business is five (5), although it will be possible to move forward with less and add more over time
  • Candidates for delegate are presented via the GovernorMills voting feature on inverse.finance. DAO members will have a minimum of 5 days notice before a vote for delegates is to take place. DAO members will be given 72 hours to place their votes.
  • DAO members holding INV or xINV holders on Ethereum delegate their votes via GovernorMills voting system. Voters choose one candidate from the presented candidates to serve as their on-chain delegate, and send their signatures to that delegate

Delegate Responsibilities

Delegates should:

  • Act as representatives of their electorate, working in the best interests of the DAO
  • Curate & filter informal proposals, and turn valuable ideas into detailed formal proposals. Manage the proposal posting process and recommend changes to ensure continual improvement of the proposal and/or GovernorMills system.
  • Carry out publicly visible discussions with their electorate, including discussions of formal proposals to be voted upon
  • Carry out publicly visible discussions with the other delegates regarding decision making & future proposals
  • Effectively communicate decision making regarding the allocation of DAO resources

Delegate Guidelines

  • Being a delegate is a privilege that comes with responsibility.
  • Delegates are expected to report their activities to their electorate and/or the entire DAO on at least a quarterly basis, if not more frequently. Delegates are expected to communicate both the work they have done over the current period and their desire to maintain their position.
  • Delegates may vote via majority vote of all delegates to remove a delegate.

Delegate Voting Process

  • Up for discussion: What decisions for the DAO require an on-chain vote by delegates? What are criteria for a vote to be an on-chain vote? Which votes can occur informally via forum or snapshot?
  • Proposal requires 50.1% majority or higher of delegate votes to pass (e.g 3 out of 5, 4 out of 7, etc.)
  • Proposals are usually discussed by the DAO on Discord or on the Inverse Finance forum (Discourse) before being posted for a formal vote on GovernorMills, though it is also permissible to post a proposal directly to GovernorMills directly.
  • The time between posting a proposal and concluding voting is five calendar days.

Removing a Delegate

  • A delegate may be flagged by another delegate for neglecting their duties, a vote can be made to begin the process for removing the delegate, which may be initiated by a majority vote of the other delegates. The delegate will have a 2 week period to defend themselves in front of the DAO starting with the date of the vote to remove by a majority of delegates
  • If the delegate is still found not to have effectively addressed their issues or pleaded their case, a vote for their removal will go in front of the DAO and DAO members may vote to move their delegated votes to another candidate or delegate.
  • Any delegate that has been removed will no longer be eligible to become a delegate in the future

Adding Additional Delegates

  • The number of delegates serving on the Delegate Council may be increased via majority vote of the current delegate council.

Compensation

  • Gas used for voting will be reimbursed by the DAO (in ETH or DOLA?) on a monthly basis. Delegates will submit an invoice to DAO’s head of ops who will reimburse within 7 days.

  • Delegates will be allocated (TBD) INV for a 12 month term, with monthly vesting to ensure that delegates are motivated to enact beneficial proposals

Voting

FOR:

  • DO establish these guidelines to be referred to as a formal framework for the Inverse DAO delegate system

AGAINST:

  • DO NOT establish any formal guidelines
4 Likes
3

In favor of setting up a structure as described above.

4

Well written, I’m in favor!

The delegates should pick up on the proposals which concern their voters and all token holders. This would include electing members for the delegate council and possibly other leadership positions, long term budgeting, major changes in IF identity, Anchor functionality, VC investments and similar broad strokes.

I believe it best that the delegates should NOT bring proposals on chain for new hires, the formation and budgeting of small working groups and pods, community related issues and hierarchy.

Can the delegates abstain from voting? Can we please set a quorum of minimum three votes to avoid that a single delegate can decide for all?

There is very little emphasis on regular communication in the proposal and I suggest that each delegate will need to comment on every proposal.

Looking forward to seeing this in action!

Edit:
For context, the governance as outlined in the docs
" The Inverse DAO controls a number aspects of the Inverse.Finance universe and products, including but not limited to:

  • The INV governance token

  • The Inverse DAO treasury (INV tokens, Anchor profits and Vault profits)

  • Vault parameters

  • Anchor Banking parameters (fees, collateral ratios, liquidation parameters etc)

  • Anchor Stabilizer parameters (fees, debt ceiling)"

5

what is the minimum number required to add a proposal?

6

this needs clarification in this proposal … perhaps add bulleted list of topics that require an on-chain vote

7

So the voting process is 1 delegate, 1 vote, correct?

8

is gas reimbursed in ETH or DOLA?

9

per Nakamomo above - is there a quorum requirement for delegate voting or just a 50.1% majority of elected delegates?